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Wind Energy UpdateWind Energy Update
Larry Flowers Larry Flowers National Renewable Energy Laboratory National Renewable Energy Laboratory
November 30, 2007November 30, 2007Salt Lake City, UTSalt Lake City, UT
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Capacity & Cost TrendsCapacity & Cost Trends
Increased Turbine Size - R&D Advances - Manufacturing Improvements
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Capacity (MW)
Cost of Energy (cents/kWh*)
Cost of Energy and Cumulative Domestic Capacity
*Year 2000 dollars
Increased Turbine Size - R&D Advances - Manufacturing Improvements
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Capacity (MW)
Cost of Energy (cents/kWh*)
Cost of Energy and Cumulative Domestic Capacity
*Year 2000 dollars
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U.S Lagging Other Countries for U.S Lagging Other Countries for Wind As a Percentage of Electricity ConsumptionWind As a Percentage of Electricity Consumption
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Installed Wind Capacities Installed Wind Capacities (‘99 – Sept 07)(‘99 – Sept 07)
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Drivers for Wind PowerDrivers for Wind Power
• Declining Wind Costs• Fuel Price Uncertainty• Federal and State
Policies• Economic Development• Public Support• Green Power• Energy Security• Carbon Risk
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Natural Gas – Historic PricesNatural Gas – Historic Prices
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Nominal $/MMBtu (Henry Hub)
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Nominal $/MMBtu (Henry Hub)
Source: LBNL
NYMEXnatural gas futures strip
from 07/21/2006
Daily price history of 1st-nearbyNYMEX natural gas futures contract
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Nationally, Wind Has Been Competitive Nationally, Wind Has Been Competitive with Wholesale Power Prices in Recent Yearswith Wholesale Power Prices in Recent Years
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In 2006, Wind Projects Built Since 1997 Were In 2006, Wind Projects Built Since 1997 Were Competitive with Wholesale Power Prices in Most RegionsCompetitive with Wholesale Power Prices in Most Regions
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Wind Cost of EnergyWind Cost of Energy
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COE (¢/kWh [constant 2006 $])
Low wind speed sites
High windspeed sites
Depreciated Coal
Depreciated Wind
New Coal
2006: New Wind
Natural Gas (fuel only)
2007: New Wind
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COCO22 prices significantly prices significantly
increase the cost of coalincrease the cost of coal
Levelized Cost of Electricity (2010) vs. CO2 Price
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Carbon Price ($/ton CO2)
2006$/MWh
Coal PC
Coal IGCC
Coal IGCC w/CCS
Gas CC
Nuclear
Wind Class 6
Wind Class 4
Wind Offshore Class 6
Source: UCS/Black & Veatch
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Economic Development ImpactsEconomic Development Impacts
• Land Lease Payments: 2-3% of gross revenue $2500-4000/MW/year
• Local property tax revenue: ranges widely - $300K-1700K/yr per 100MW
• 100-200 jobs/100MW during construction
• 6-10 permanent O&M jobs per 100 MW
• Local construction and service industry: concrete, towers usually done locally
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Environmental BenefitsEnvironmental Benefits
• No SOx or NOx
• No particulates
• No mercury
• No CO2
• No water
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Source: NOAA
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Source: NOAA
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Energy-Water NexusEnergy-Water Nexus
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Key Issues for Wind Power Key Issues for Wind Power
• Policy Uncertainty• Siting and Permitting: avian,
noise, visual, federal land • Transmission: FERC rules,
access, new lines
• Operational impacts: intermittency, ancillary services, allocation of costs
• Accounting for non-monetary value: green power, no fuel price risk, reduced emissions
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Integrating Wind into Power SystemsIntegrating Wind into Power Systems
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State of the Union Address“…We will invest more in … revolutionary and…wind
technologies”
Advanced Energy Initiative
“Areas with good wind resources have the potential to supply up to 20% of the electricity consumption of the United States.”
A New VisionA New VisionFor Wind Energy in the U.S.For Wind Energy in the U.S.
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- 200 400 600 800 1,0000
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Quantity Available, GW
Levelized Cost of Energy, $/MWh
Onshore
Class 6
Class 4
Class 7
Class 5
Class 3
Offshore
Class 6
Class 4
Class 7
Class 5
Class 3
10% Available 10% Available
TransmissionTransmission
2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs
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Utah – Economic Impacts Utah – Economic Impacts From the 20% Vision From the 20% Vision
(2,449 MW new Utah development)(2,449 MW new Utah development)
Payments to Landowners: • $6.53 million/year Local Property Tax Revenue:• $27.24 million/yearConstruction Phase:• 3,883 new jobs• $461.8 M to local economiesOperational Phase:• 616 new long-term jobs• $52.0 M/yr to local economies
Construction Phase:• 3,292 new jobs• $292.2 M to local economiesOperational Phase:• 497 local jobs• $46.1 M/yr to local economies
Wind energy’s economic “ripple effect”
Construction Phase = 1-2 yearsOperational Phase = 20+ years
Indirect & Induced Impacts
Totals (construction + 20yrs)
Direct Impacts
Total economic benefit = $2.72 billion
New local jobs during construction = 7,175
New local long-term jobs = 1,113
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Fuel Savings From WindFuel Savings From Wind
0.0E+00
5.0E+09
1.0E+10
1.5E+10
2.0E+10
2.5E+10
3.0E+10
3.5E+10
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Gas Fuel Savings
Coal Fuel Savings
Gas Fuel Usage(20%wind)Coal Fuel Usage(20%wind)
Reduction in National GasConsumption in 2030 (%)
Natural Gas Price Reduction in 2030 (2006$/MMBtu)
Present Value Benefits(billion 2006$)
Levelized Benefit of Wind ($/MWh)
11% 0.6 -1.1- 1.5 86 - 150 - 214 16.6 - 29 - 41.6
Electricity Sector Fuel Usage
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Cumulative Carbon SavingsCumulative Carbon Savings
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CumulativeCarbon Savings
(2007-2050, MMTCE)
Present Value Benefits(billion 2006$)
Levelized Benefit of Wind($/MWh-wind)
4,182 MMTCE $ 50 - $145 $ 9.7/MWh - $ 28.2/MWh
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Incremental direct cost to society $43 billion
Reductions in emissions of greenhouse gasses and other atmospheric pollutants
825 M tons (2030)
$98 billion
Reductions in water consumption 8% total electric
17% in 2030
Jobs created and other economic benefits
140,000 direct
$450 billion total
Reductions in natural gas use and price pressure
11%
$150 billion
Net Benefits: $205B + Water savings
Results: Results: CostsCosts & Benefits& Benefits
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ConclusionsConclusions
• 20% wind energy penetration is possible• 20% penetration is not going to happen under business
as usual scenario• Policy choices will have a large impact on assessing the
timing and rate of achieving a 20% goal• Key Issues: market transformation, transmission, project
diversity, technology development, policy, public acceptance
• 20% Vision action plan: December 2007
Source: AWEA 20% Vision
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Carpe Ventem
www.windpoweringamerica.gov